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> Norway is 210% debt to income. > Canada is 178% debt to income. > The threshold of 100% is a big deal. It's when discretionary spending stops. At 100%, your

> Norway is 210% debt to income. > Canada is 178% debt to income. > The threshold of 100% is a big deal. It's when discretionary spending stops. At 100%, your income goes 100% toward servicing debt. You're confusing two different measures there. The first two are "total debt" (a stock) vs "total income" (a flow). Then, in the last paragraph, you switch to talking about consumption declines as if the total debt stock was directly comparable to a total income flow, which it obviously isn't. The total interest due on the debt is the flow that you should be comparing to the total income flow. (Otherwise, if spending stopped at 100% debt-to-income, how could Canada and Norway's economy be working at 1.8 and 2.1 times that trigger threshold?) My mortgage debt (the stock) is give-or-take 100% of our annual household income (the flow). We have plenty of money left over each month to buy things, because the payments on that mortgage (the flow) are a sensible fraction of our household income (the flow).

incomingpain 3y ago
>The total interest due on the debt is the flow that you should be comparing to the total income flow. That's what these numbers are. I'm talking about a calculated popular metric many people use for many countries all over the world. It's really not a controversial or debated subject for either of these countries.
- sokoloff 3y ago
  You’re incorrect about what that figure is. https://tradingeconomics.com/norway/households-debt-to-income https://tradingeconomics.com/norway/households-debt-to-incom... That means for every 100 units of annual income, Norwegians owe 210 units in total debt. (Not total debt service payments [a flow, with unit of kr/yr], but total debt [a stock, with unit of kr].)
  - incomingpain 3y ago
    >You’re incorrect about what that figure is. Why then would all these countries, as websites such as your source be calculating such a useless indicator? If I am incorrect?
    - sokoloff 3y ago
      It's not a useless measure. Normalizing total debt against total income is a sensible way to compare countries to another. It's just not a measure that is a unitless ratio of two measures with the same units. (The unit is years [of income to payoff the debt if no further interest accrued].)
      - incomingpain 3y ago
        >It's not a useless measure. Thanks for confirming that. I'll return to my original post then.

incomingpain 3y ago

>The total interest due on the debt is the flow that you should be comparing to the total income flow. That's what these numbers are. I'm talking about a calculated popular metric many people use for many countries all over the world. It's really not a controversial or debated subject for either of these countries.

sokoloff 3y ago
You’re incorrect about what that figure is. https://tradingeconomics.com/norway/households-debt-to-income https://tradingeconomics.com/norway/households-debt-to-incom... That means for every 100 units of annual income, Norwegians owe 210 units in total debt. (Not total debt service payments [a flow, with unit of kr/yr], but total debt [a stock, with unit of kr].)
- incomingpain 3y ago
  >You’re incorrect about what that figure is. Why then would all these countries, as websites such as your source be calculating such a useless indicator? If I am incorrect?
  - sokoloff 3y ago
    It's not a useless measure. Normalizing total debt against total income is a sensible way to compare countries to another. It's just not a measure that is a unitless ratio of two measures with the same units. (The unit is years [of income to payoff the debt if no further interest accrued].)
    - incomingpain 3y ago
      >It's not a useless measure. Thanks for confirming that. I'll return to my original post then.